ASSYSTEM_Registration_Document_2017

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FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Figures relating to provisions are presented in Note 9.1 – Provisions.

MAIN SOURCES OF ESTIMATION UNCERTAINTY The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that can affect the reported amounts of certain assets and liabilities and income and expenses. The impact of any changes in estimates is accounted for on a prospective basis. The estimates are made by Management based on the going concern principle using information available at the reporting date. They may change, however, due to circumstances or new information that could require a reconsideration of the context in which they were prepared. Actual results may therefore differ from the estimates. The random nature of certain estimates may make it difficult to ascertain the Group's economic outlook, particularly in relation to asset impairment tests (see Note 3.3 – Goodwill). The accounting items that are the most exposed to the risk of estimation uncertainty are described below. Revenue recognition As described in Note 5.1 – Revenue and working capital requirement, revenue is recognised at the fair value of the consideration received or receivable for the services rendered by the Group. Revenue generated from long-term service contracts is accounted for in accordance with IAS 11. The stage of completion of projects and the amount of revenue recognised are determined using numerous estimates based on cost-monitoring and past experience. Estimates and assumptions may be adjusted throughout the term of the contract and could have a significant impact on future profit. Provisions for expected losses on engineering contracts may be recognised when applying the percentage of completion method in accordance with IAS 11 (see Note 5.1 – Revenue and working capital requirement). When it becomes probable that total contract costs will exceed total contract revenue a provision is immediately recognised for the related loss, after deducting any previously recognised losses. However, the loss actually recognised on completion of the contract may differ from the amounts originally provisioned, and may have an impact on future profit. Provisions for losses on completion of contracts and project warranty costs

Impairment of trade receivables An impairment loss is recognised on trade receivables if the present value of future amounts to be collected is less than their nominal value. The amount of the impairment loss recognised takes into account the age of the receivable and the debtor's capacity to honour its obligations. A lower recoverability rate than estimated or a default by a major client could adversely affect future profit. Figures relating to impairment of trade receivables are presented in Note 5.1 – Revenue and working capital requirement. Deferred taxes Deferred tax assets are recognised for the carryforward of unused tax losses and unused tax credits and deductible temporary differences only to the extent that it is probable that the Company and/or its subsidiary(ies) concerned will have sufficient future taxable profit against which the unused tax losses, tax credits or temporary differences can be utilised. In assessing whether it will have sufficient taxable profit to recover deferred tax assets, the Group takes into account forecasts of future taxable profits, non-recurring expenses included in past losses and which will not be incurred again in the future, and its past history of taxable profit for prior years. Figures for deferred taxes related to unused tax losses and temporary differences are presented in Note 12.3 – Deferred taxes. Goodwill impairment The estimates used in the assumptions for calculating goodwill impairment are set out in Note 3.4 – Goodwill impairment testing. Employee benefit obligations The estimates and assumptions used for calculating employee benefit obligations and the related sensitivity analyses are set out in Note 5.3.2 – Employee benefit obligations.

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ASSYSTEM

REGISTRATION DOCUMENT 2017